"As Good as It Gets": Why One Analyst Says Nvidia Has Peaked as Stock Tanks

Nvidia's (NVDA) stock has been on a rollercoaster ride in recent months, with shares down about 5% for the year so far after nearly tripling in value in 2024. Despite the recent decline, the stock remains up 65% from a year ago, reflecting the company's strong historical performance and growth prospects in the AI market. However, one analyst, Mott Capital founder Michael Kramer, has raised concerns about the stock's long-term prospects, suggesting that Nvidia may have peaked.

Kramer's analysis is based on several factors, including the market's tame response to Nvidia's latest earnings report, the stock's performance since June 2023, and the consensus price target of about $175, which would imply limited upside potential. These factors suggest that investors may have already priced in much of the good news, and the stock's growth potential may be limited in the short to medium term.

Nvidia's strong earnings and growth in AI-related segments, as well as its leading position in the AI chip market, could still drive long-term growth and value creation for the company. However, the recent stock performance and market sentiment could indicate that some of the good news has been priced into the stock, and investors may be waiting for more catalysts to drive the stock higher.

Competitive pressures, such as the emergence of DeepSeek, play a significant role in shaping Nvidia's future growth trajectory. DeepSeek's sophisticated, lower-cost model raised doubts about Big Tech's spending on AI infrastructure, which could potentially impact Nvidia's bottom line. However, several analysts have suggested that DeepSeek's rise could actually benefit Nvidia by accelerating the adoption of more efficient, inexpensive AI models.

Nvidia's CEO, Jensen Huang, acknowledged the competition but expressed confidence in the company's position. He stated, "We defined Blackwell for this moment," referring to Nvidia's latest architecture, which is designed to excel in AI tasks. Huang also mentioned that Nvidia has partnered with DeepSeek to bring optimizations to Blackwell, indicating that the company is not only aware of the competition but also actively engaged in responding to it.

In conclusion, while Nvidia's stock has experienced a decline in early 2025, it remains up significantly from a year ago, reflecting the company's strong historical performance and growth prospects in the AI market. The recent stock performance can be attributed to various factors, including market sentiment, DeepSeek's launch, and investor expectations. The company's current valuation reflects investors' optimism about its growth prospects, but some analysts suggest that all the good news may have been priced into the stock. Competitive pressures, such as the emergence of DeepSeek, play a crucial role in shaping Nvidia's future growth trajectory, but the company's response to these challenges indicates that Nvidia is well-positioned to face the competition and continue its growth in the AI chip market.